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Commercialisation and the Cape Town Stadium

CITY OF CAPE TOWN, 21 JUNE 2012, MEDIA RELEASE

The Record of Decision, Commercialisation and the Cape Town Stadium

After an extensive administrative and public engagement process the then Minister of Environmental Affairs and Development Planning in 2009 approved a Record of Decision (ROD) as part of an environmental impact assessment. The conditions contained therein pertained to the remodelling of the Green Point Common and the construction of the Cape Town Stadium to host the 2010 FIFA World Cup™ tournament in Cape Town.

The existing Stadium Uses permitted in terms of the ROD and Zoning Scheme (LUPO) approvals limit any form of commercialisation, specifically not allowing for stand-alone commercial and retail outlets, commercial parking and hiring out of commercial office space to Third Parties.

In a post 2010 FIFA World Cup™ scenario, it has become clear that in order to reduce the burden on the rates base of the City, alternate forms of revenue needed to be generated. Revenue is currently generated through the hosting of events in the stadium bowl, function rooms and the stadium precinct; film and photo shoots; tours though the stadium and through the hire of ancillary services such as pitch protection and fencing.

Commercial activities such as food, beverage and merchandising sales are only permissible on event days. Revenue generated from these activities is therefore considered inadequate to sustain a modern, highly technical stadium of this magnitude. A reduction of activity is also noted on non-event days due to an absence of activity in the stadium precinct.

In an effort to address this, the City commissioned an independent business analysis consultancy to recommend alternate ways of generating revenue to attain financial sustainability. Based on their investigation of international stadia of comparable stature, the business analysts suggested various possibilities. These included the establishment a public entertainment node containing stand-alone restaurants, coffee shops and sports bars.

As these suggestions are currently prohibited, a revisit of the ROD and zoning provisions was deemed necessary. The City has not and cannot make any decisions on changing the activities on the Green Point Precinct without having conducted the required legislated steps, including an extensive public consultative process. The Mayoral Committee of the City was requested to consider this proposal and after due consideration granted permission for this review to be initiated.

The next steps in the process are as follows:

The City will appoint an independent Environmental Assessment Practitioner (EAP) who will conduct an assessment of the impact of the recommendations proposed by the business analysts on the ROD. This investigation will reveal whether any proposed commercial activity will result in minor or significant impact on the environment and hence whether minor or major amendments to the ROD and zoning provisions will be required. The City will also be required to appoint an independent facilitator to manage all public engagement processes and dialogues.

This investigation into a review of the ROD and land use provisions is expected to be initiated in October 2012 after the necessary tender processes for the appointment of the required specialists have been concluded. The final outcome of this review is anticipated to be concluded in the first quarter of 2014.

"It may be too early to pre-empt an outcome of this process, but a win-win position for all affected, impacted and interested parties across the city is the desired outcome sought by the City of Cape Town", said Councillor Grant Pascoe, Mayoral Committee Member for Tourism, Events and Marketing.